We asked James Farge, Managing Director of estate agency HIVE and Partners, to share his property market insight on a topic that is on the minds of many movers and property owners.
PICTURED ABOVE James Farge, Managing Director
Why are the Bank of England putting up interest rates so fast?
With the aim of curbing spiralling inflation, the Bank of England has raised ‘Base Rate’ for the for the fifth consecutive time, from 0.1% in January to 1.25% today. There are several key factors influencing the UK’s high inflation, including Brexit, the Pandemic, the war in Ukraine, and the impact of fuel price hikes. A substantial impact is the economic medication provided by the Government during the pandemic, schemes such as furlough, CBILS (Coronavirus Business Interruption Loan Scheme), and ‘eat out to help out’.
So, what impact will the Base Rate rise have on the UK property market and how will this affect a property’s value?
The short answer is that there is no certainty as to what will happen. If the past two years has taught us anything, it’s that housing markets react unpredictably after a major global event. However, the HIVE team is here to advise you on how to best mitigate selling or buying at the wrong time – and how to recognise property opportunities in an uncertain market.
The property market is influenced by several factors, two of the biggest drivers are: 1). The availability and cost of debt (loans and mortgages), and 2). Market sentiment (buyer confidence). With interest rates rising faster than they have in 40 years, debt is becoming more expensive. In the coming months, some buyers will be forced to re-evaluate their position and take less debt exposure as a multiple of their affordability. This will have a knock-on effect, with some buyers reducing their purchasing expectations, and some deciding it is too expensive to buy and pausing their search. The current narrative is that property prices are high, and lower price borrowing is becoming harder to obtain. This situation is likely to make more buyers more cautious over time.
Is it all doom and gloom? When is a good time to sell?
We are always honest with our customers and it’s our belief that the property market is going to become challenging with downward pressure on house prices. But we must factor in the shortage in property stock which will go some way to rally against the impact of rising interest rates, making this a very interesting market. My advice is that if you are looking to sell – do not wait! Get your property listed and under offer as quickly as possible and take advantage of the current market buoyancy by securing your buyer at a good price.
What if I am looking to buy?
If you are looking to buy, debt remains historically cheap; if you move quickly, you can still fix your mortgage at a sensible rate for three or more years, which will help to ride out the potential pricing fluctuations we are going to see over the next few years.
How do I ensure I get the best price for my property?
If you are looking to sell, you will need to ensure that your property really stands out from the competition. Don’t forget, the marketing your agent produces is your shop window to sell your property to the widest audience. When you instruct an agent, you should ensure that you have a complete marketing package that will attract a range of buyers. Here are some top tips.
Ask potential agents to show you:
- Examples of their high-quality, bespoke brochures that will best showcase your property
- Their property portal advertising: including enhanced listings to stand out from the crowd
- Their local and national marketing strategies, which will attract buyers from around the country, including people relocating
- Top quality online video content, including drone footage
- Social media campaigns that ensure all avenues are explored to find you that perfect buyer.
The days of listing a property on Rightmove with some poorly lit pictures taken by the agent and hoping someone calls in are over. In a difficult market, great deals are done, but only by those that have great marketing.
If you are thinking of selling anywhere in Dorset, please do call me or my team at HIVE and Partners where we will be pleased to demonstrate how, if things get tough, we will still ensure you get moved.
CONTACT
T. 01202 122 002
E. sales@hiveandpartners.co.uk
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